Why It Matters:

This deal represents a major shake-up in the textbook market. Barnes & Noble has long dominated textbook sales, with annual revenues of up to $1.75 billion. This revenue stream helps explain why the bookseller has managed to stay in business for so long. If Amazon is able to corner the textbook market, this could put a serious strain on the competitive market that exists with textbook wholesalers and resellers currently in the market. Meanwhile, college students will see their textbook prices drop, while Amazon will gain greater control over which textbooks are chosen.

This Deal Benefits Everyone Involved:

Amazon’s college partnerships give students relief from rising education costs, give professors more latitude in choosing textbooks, and allow colleges to profit from book sales. Students are already buying their textbooks on Amazon. This deal just makes it easier for them while giving their schools a cut of the revenues. Moreover, companies like Barnes & Noble can still compete to supply textbooks, but now they’ll face pressure to lower their prices and offer better service.

This Deal Makes Amazon Too Powerful:

As economists like Paul Krugman have pointed out, Amazon’s increasing dominance of the book market has dangerous consequences for free expression. It is true that many students will benefit from the company’s lower prices, but cheaper textbooks are hardly worth interference in the curriculum. Amazon’s growing market share has given it the power to influence reading trends. If the company refuses to carry a particular book, or carries it but offers a poor deal on shipping, consumers are less likely to read that book. Amazon has already done this in the commercial book market. It will undoubtedly do the same with textbooks, offering better deals on books it agrees with and thus influencing college curricula. That’s too much power for one company to have.